Gores group made its founder alec gores a billionaire by taking companies private. now it aims to create fortunes on the public market too. on wednesday, the beverly hills-based private equity firm announced a record-breaking merger. one of its listed blank cheque affiliates will combine with united wholesale mortgage, whose equity would be valued at $16bn.

Omens look reasonable for the latest in a succession of us deals involving special purpose acquisition companies (spacs). these enable private companies to list without a flotation. the us mortgage market continues to sizzle. uniteds rival rocket companies has seen its shares rise almost a fifth since its august initial public offering.

However, gores previous spac record is mixed. three other companies it has sponsored trade between roughly $8 and $12.50 per share, not far from the standard spac ipo price of $10. the knock against blank cheque deals is that they are more generous to sponsors like gores than ordinary investors.

Gores has a reputation as a savvy buyer across industries. the three companies that it has taken public through its spacs span packaged food (hostess brands), traffic technology (verra mobility) and defence services (pae).

Hostess, best known as the maker of snack brand twinkies, now trades at $12.50 per share. while it has benefited from the pandemic snacking phenomenon, in 2017 shares were worth more than $17.

Verra mobility and pae are below $10, even as the broader equity market has been resilient. the pair have particular vulnerabilities to the pandemic and may ultimately recover.

For now, gores has no spac debacles but no big triumphs either. perhaps united wholesale will be the latter. the mooted valuation is roughly 10 times forward earnings, a discount to the broader mortgage and financial services sector.

Corporate sellers may not mind the relatively pedestrian performance of gores spacs. the vehicles are meant to help protect vendors against the massive mispricings sometimes seen in the ipo market. shares trading within a tight band suggest valuations agreed with the firm have been fair.

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